You’re working hard, but still feel broke

* Transcript created by AI – may contain errors or omissions from original podcast audio

My clients and students usually come to me with one of two problems. The first, I wanna make more money, I need to make more sales, or the second challenge is I’m so freaking busy and I’m drowning. Well, today I’m gonna talk to you about another challenge that sits a little bit beneath the surface that sometimes people don’t even know what’s going on. It’s when you are actually achieving growth in your business and getting great results, but not feeling like you have any spare money. Today I’m gonna dive into what the core problem is and how you can solve it.

So as I alluded to in the intro, there is often a phase of business that business owners who haven’t been on a journey to learn about their [00:01:00] numbers encounter, which is when you are achieving growth in your sales, but not feeling like you have any spare money, you might still feel broke. And the reason for this is that you might be rapidly growing the sales, however it’s not translating into profit or cashflow. Now, as soon as I start talking about accounting, gobbledy goop, like profit and cashflow, I know that a lot of business owners tend to switch off. And there can even be this story that pops up. I don’t need to worry about tracking it. I just need to make more money. Here’s the reality, saying I’ll worry about tracking money when I’m making more is like saying I’ll learn to drive when I’m already at my destination.

The [00:02:00] truth is, poor financial tracking is often the reason why you not making more money. So today what I wanna do is share with you three real life case studies of how not knowing your numbers is actually keeping you broke. So story number one, this was a digital marketing agency that I worked with.

I’ve worked with a lot of digital marketing agencies over the years actually. I tend to work with a lot of creative business owners. And so I was working with this one particular agency and on the outside, my beautiful client had what looked like a thriving business. She had a team, plenty of clients and beautiful social media.

It all looked really successful on the outside. The problem was she was [00:03:00] working her butt off and barely making any money. And when we worked together, she was inside one of my mastermind containers. I did a call with her and we actually dived into her clients, into her spreadsheets, and I realized that her clients were paying her as little as $300 a month for social media management.

Now, bear in mind, she also had a team. So often she would have team members working on these accounts and literally wasn’t even sure if each client was profitable. So I encouraged her, strongly encouraged her to do a piece of work, to check the client profitability, to check client by client how much money she was making.

And no surprises, she was actually losing money on most of her clients by the time that she [00:04:00] took out her costs. No wonder she felt broke, even though on the face of it, she had a really good turnover and she was making good money. And when we dove a little bit deeper into what was going on. My client had actually come from money.

She’d come from a wealthy family, and then she actually found a partner who also was quite wealthy. So she had this underlying belief that money is always gonna be there. I don’t need to keep an honor, I don’t need to stress about it. And so this experience was really eyeopening for her. She didn’t wanna be riding off her parents or her partner’s hotel the rest of her life.

She wanted to be running a profitable business in and of her own. So it was only through having that information that she realized why she was working really, really hard. But still, felt broke. Story number two. [00:05:00] This client of mine had a huge thriving business in interior design. Her business was turning over a million dollars a year in revenue, and she was leading a really beautiful, luxurious lifestyle.

But she hired me because she didn’t really know what was going on with her numbers, and it kind of felt like money and cash was always tight, even though she was making a million dollars a year. So we sat down, got deep into her numbers, and we realized that even with a million dollar a year turnover, she was barely making a profit.

And on top of that. She actually had accumulated a massive amount of tax bills that she was lagging really behind on. And even though my client is brilliant at what she did and incredibly smart, she just had no [00:06:00] idea when it came to the financial side of business. And so again, on the outside, it all looked really amazing, but deep down inside there was some work that had to be done there.

And the third client story that I wanna share with you was a client of mine who was ticking along in an osteo business. So she ran her business unlike the client I mentioned before that had the really high expenses, this client actually ran a really lean business. She just worked incredibly hard and kept her costs low.

But she had a vision that she wanted to open another practice and to do so she would’ve needed to hire new team members. And when I said, why haven’t you gone for it? She said, “I dunno if I can afford it. I’m too scared to lean into the investment. I’m really unsure if this is even an option for me.”

So again, we got deep into her numbers and I was just [00:07:00] blown away. She had a huge cash buffer. Her current business was wildly profitable, and through having that knowledge, I was able to show her that there was plenty of buffer there. We did a calculation of how many months of running a new practice she could do without even turning a cent of profit.

And it was incredible that there was a buffer there of six months. And we knew, of course, based on the success of the first one, that she’d likely be able to be turning a profit before six months. So that gave her a lot of confidence to go and make that decision and take that leap. But she wouldn’t have had the confidence to do that without having this level of visibility.

After making that decision and opening the new practice, my client actually had her first $88,000 sales month, which is a run rate to hit a million dollars of revenue [00:08:00] a year. So the reason I wanted to share these stories is I wanted to give you proof that knowing your numbers isn’t just, “Oh, it’s nice to know what’s going on.”

It actually helps you to make more money. Now if you are listening to this and any of these stories are resonating, or maybe you just know that it’s time that you need to get empowered when it comes to your numbers, please keep an eye on my emails. If you aren’t on my email list, go to the show notes for today’s episode.

I’ve got a ton of fabulous freebies there because I’m gonna be running a challenge next month, which is called the Fix Your Finances Challenge. I haven’t ran this in over 12 months. I’m so excited to be bringing it back. It’s a free challenge and people who’ve come through saved thousands of dollars and added thousands of dollars to their bottom line by implementing the things I teach in this exact challenge.

So you need to be on my mailing list to make sure that you hear [00:09:00] about it. I can’t wait to take you through and help you to fix your finances, but for now, I want you to leave the episode with the knowledge that if you are working hard but still feel broke, chances are you need to really get familiar with those finances and hopefully this might be your sign to finally get on top and fix your finances, because knowledge is power and having that knowledge can actually lead to more money. Have a fabulous week, and I’ll chat to you again next week on The Clare Wood Podcast.

* Transcript created by AI – may contain errors or omissions from original podcast audio